CZECH COMMENTS ON GAS DISPUTES BETWEEN RUSSIA AND

C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 000809

SENSITIVE
SIPDIS

EUR/ERA EMCCONAHA, EUR/CE FOR ATRATENSEK

E.O. 12958: DECL: 12/29/2013
TAGS: EUN EZ EG PGOV PREL ENRG EPET UP
SUBJECT: CZECH COMMENTS ON GAS DISPUTES BETWEEN RUSSIA AND
UKRAINE

REF: A. STATE 134475

B. BRYZA-LUCAS E-MAIL DATED 12.23

C. HENGEL-BRYZA E-MAIL DATED 12.20

Classified By: Acting POLEC Counselor Amy Carnie for reasons 1.4 (b) an
d (d).


1. (SBU) Summary: Emboffs spoke with Czech Ambassador at
large for Energy Security Vaclav Bartuska as well as
additional MFA officials regarding potential gas supply
disruptions between Russia and Ukraine. While the Czechs have
considered and discussed a number of possible scenarios with
their EU counterparts and are monitoring the situation
closely, they view Ukrainians and Russians accusations with
strong skepticism given these countries lack of effort to
increase transparency in the energy sector and think the
primary responsibility for resolution remains squarly in
their two hands. The End Summary.

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Skeptical that Ukrainians or Russians Want Transparency
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2. (C) Ambassador Bartuska noted that he has been speaking
with a range of Ukrainian, Russian, EU and USG officials
regarding a potential disruption of gas supplies from Russia
to Ukraine. He stated that both the Russians and Ukrainians
have been disputing everything - from quantity (and quality)
of the gas supplied to whether or not payment has been made.
At this point, Bartuska questions the potential efficacy of
trilateral talks as well as the benefits of an "arbiter,"
given Ukrainian and Russian accusations as well as the lack
of action by either government to enhance transparency within
the energy sector. According to Czech MFA North Europe and
East Europe Department official Radek Matulak, the Czech
charge in Moscow spoke with GAZPROM Deputy Chairman Alexander
Medvedev and in Ukraine the Czechs spoke with Naftogaz
Chairman Oleg Dubin. Apparently Medvedev indicated that
Russia had put forward a proposal to Ukraine with a gas price
reduction. It is unclear whether this has gone anywhere.


3. (C) One concrete step that Bartuska would like to see is
the establishment of a measuring/metering station on the
Ukraine-Russian border. Such a step, in his opinion, would
allow for more straightforward verification of both the
quantity and quality of gas flowing between the two
countries. Bartuska bluntly acknowledged that he does not
trust what he is hearing from officials in Ukraine or Russia
and that it has been very difficult to differentiate between
whether these officials are speaking on behalf of their
governments, or based on their own personal economic
interests.
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Preference for resolution on a commercial basis
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4. (C) Bartuska indicated that while EU member states are all
monitoring the situation closely, the Czechs would like to
see this gas dispute resolved on a commercial basis. In a
separate conversation, MFA official Matulak told Emboff that
the Czechs internally discussed several possible scenarios
two weeks ago, in anticipation of a potential gas disruption
to Ukraine. Bartuska also has been consulting with EU Energy
Commissioner Piebalgs, who apparently thinks slightly
differently than Bartuska, in that Piebalgs appears to
supports the idea of greater and more direct EU engagement.
Bartuska, however, is not nearly as convinced and cites the
fact that Piebalgs was told earlier this week by both
Ukrainian PM Tymoshenko and President Yushchenko that
payments would be made December 30, but to Bartuska's
knowledge, this has not occurred.

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Czechs Relatively Well-Positioned with Gas Reserves
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5. (C) According to Bartuska, the Czechs, and much of the
rest of the EU appears relatively well positioned in terms of
gas reserves, in the event that gas from Russia is turned off
via the Ukrainian pipeline. He commented that currently the
Czech Republic's gas storage facilities are full and that
given gas consumption trends over the last two years and the
current consumption rate (between 35-40M metric tons a day),
Bartuska estimates that the Czech supply should last roughly
70-80 days. Based on talks with EU counterparts, it is his
understanding that many have larger than typical gas reserves
at the moment and/or receive gas from multiple sources. The
one EU country he is potentially worried about is Hungary,
although he did not explain further. As an additional note,
Bartuska commented that there will be several conferences and

PRAGUE 00000809 002 OF 002


Ministerials related to interrelated aspects of energy
security this spring, most particularly, a "Ukrainian Gas
Infrastructure Donors Conference" scheduled for March 23.

Graber